In a world of growing business challenges, Europe is less economically competitive than other regions and at risk of falling permanently behind. However, a consensus for change is emerging among both business leaders and citizens. We recently surveyed nearly 850 leaders to understand their views on European competitiveness (updating a similar analysis we conducted in early 2025). We complemented that with a similar survey of 6,400 citizens.
Although the two groups’ responses differ in some ways, they are surprisingly aligned on the urgent and immediate need for radical measures to make the region more competitive. Both sets of respondents want to improve the European Union as a whole, rather than exiting it. More noteworthy, citizens are calling on business leaders to take a public role in driving change—and CEOs are willing to step up.
The findings fall into five broad areas.
Time is running out for Europe.
Despite some recent progress, both business leaders and citizens see an urgent need for action. Among leaders, approximately 95% say that the region must protect its commercial interests, balance consumer protection with strong production in the region, and abandon its naivety in global trade. These sentiments have all increased compared with last year’s survey. Among citizens, the responses are nearly as high. If competitiveness continues to decline, business leaders foresee a range of economic and social consequences, from workforce reductions and offshoring to declining investment activity and stalled R&D efforts.
The “Liberation Day” wake-up call didn’t happen.
Hopes that the US “Liberation Day” tariff policies in April 2025 would spark bold action in Europe have since faded. The initial tariff announcement served as a catalyst, and optimism among business leaders nearly doubled as a result, from 43% before the announcement to 80% immediately following. More than six months later, however, the initial sense of urgency and momentum has disappeared.
Optimism rates are waning—to 67% among business leaders in the latest analysis. Italy is an exception, with leaders there showing an increase in optimism since Liberation Day. But optimism in Spain and the Nordics declined by 19 and 12 percentage points respectively, and by 21 points in Germany.
Regarding causes for the lack of action, the data again shows a strong alignment between business leaders and citizens, with both groups pointing to a lack of unity and shared vision among EU members.
People won’t opt out of Europe—it is the answer…
The survey asked whether the solution to economic competitiveness is “more Europe” (meaning greater cooperation and integration across the EU) or “less Europe” (more flexibility and autonomy for member states). Nearly two-thirds of business leaders and citizens said “more Europe,” compared with less than 20% for “less Europe”—a strongly positive sign.
There were some differences across countries. For example, a slightly higher share of respondents in Spain cited greater cooperation and integration, with a slightly lower share in France expressing this sentiment. Additionally, younger people generally show a stronger preference for “more Europe.” Overall, however, the degree of alignment among business leaders and citizens was striking.
…but a full reset is needed, and a path emerges.
Although respondents believe that greater cooperation is the solution, they also acknowledge that Europe must make radical changes. Alarmingly, 85% of business leaders say that the region has hit an institutional dead end.
Both groups call for regulatory reform, and 80% acknowledge that significant reform is needed:
- Only 20% believe that Europe can simplify and streamline the existing regulatory framework.
- Approximately 40% say that substantial reform is possible but will require significant political will and sustained effort.
- Approximately 40% say the current system is no longer manageable and requires a complete overhaul, even at the cost of short-term disruption.
Because regulatory reform is such a comprehensive endeavor, business leaders strongly agree that the efforts should be focused on a small group of eight to nine countries, rather than the full 27 EU member states. Similarly, there is a clear consensus of business leaders (95%) who support prioritizing a few core sectors and industries, specifically technology, energy, defense, finance, and industrial supply chains for critical products.
Citizens call on business leaders to step up—and they are ready.
Finally, reform efforts must be business-led. A vast majority of citizens (76%) and leaders (93%) say that business executives should take active, vocal roles in governments or public institutions to drive reform and increase competitiveness. One possible mechanism is an EU-level CEO working group to coordinate with policymakers on change initiatives. Across all countries, more than 80% of business leaders said they would find this kind of group useful, and nearly 85% said they would be willing to dedicate time to serve on this kind of panel.
Getting leaders involved in this way would require overcoming some challenges they cite, including reputational risks for both the executive and the company (64%), the lack of a formal mandate (54%), shareholder pressure to stay discreet (47%), and fear of political retaliation (35%).
In sum, the findings underscore the urgency of Europe’s current situation. In an increasingly competitive global economy, the region is at risk of fading into irrelevance, with dire consequences for companies and citizens in the region. Our survey results indicate that there is clear political will among both business leaders and citizens for the radical change needed for the region to claim its rightful place in the global economy.
